Money laundering update
January 2008
From 15 December 2007 the Money Laundering Regulations published by the UK Government on 25 July 2007 require certain businesses, such as financial institutions, law firms and trust and service providers, to register with the appropriate authority and ensure they have systems in place to prevent money laundering and report suspicious transactions.
Although charities are not specifically covered by the Regulations, they are at risk of serious damage if they are, however innocently, caught up in money laundering transactions, something that can happen only too easily of the identity of donors is not routinely checked and robust anti money laundering procedures put in place.
Michelle Russell, Head of Compliance and Support at the Charity Commission explains ‘Although it is unlikely that the requirements in these regulations will directly affect many charities, in general terms charities and their trustees should always be alert to the risk that a charity may be abused for the purposes of money laundering, criminal or other abuse, and they should take reasonable steps to safeguard their charity from this. Our view is that the most effective way to do so is by ensuring strong governance, financial and risk management processes are firmly in place.
See www.charitycommission.gov.uk for information on trustees’ duties to report serious incidents. The latest Annual Return (AR07) provides a new facility for trustees to report these online.
Comments
Shiferaw Kebede, 30/10/2010
For you surprise i came across this article while i was searching for informations regarding the vernerability of charties to money laundering offences. As i understood from this article, a charity may be exposed to the risk of money launderers even though the degree is less in relation to financial institutions. Particularly, as it well known, money launderers may abuse the lax regulation of charity as a coverage to launder illegal money or to use legal money for unlawful purposes such as financing terrorism. With due respect to the opinion of the author of this article, it is my comment that the typologies whereby charities exposed to money laundering should be mentioned such as donation of illegal proceeds, interest free laon, front charity etc.